USPS, Northrop Grumman and their 10 year litigation over the FSS (Flats Sequencing System) machines

In 2007, the United States Postal Service (“the Postal Service”) entered into a contract with Northrop Grumman Systems Corporation (“Northrop”) for Northrop to build and deliver 102 Flats Sequencing System machines (“FSS machines”) for a fixed price of $874 million.

Following delivery and acceptance of those machines, in 2012, Northrop filed suit under the Contract Disputes Act, 41 U.S.C. §§ 7101-7109 (2018) (“CDA”), claiming that the Postal Service breached the contract by delaying and disrupting Northrop’s performance as well as withholding payments owed.

The Postal Service counter-claimed, alleging, inter alia, that plaintiff failed to timely deliver the machines. The court held trial over eight weeks between February 3, 2020, and March 5, 2021.

The parties filed post-trial briefs, and the court held post-trial oral argument on December 8, 2021. We find for the reasons set out herein that neither party is entitled to recover on their principal claims for delay, that plaintiff is entitled to recover its unpaid contract balance, along with three specific additional cost claims, and that the government is entitled to certain offsetting claims.

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